Brent crude oil prices increased in January to an average of USD79.3/bbl m-o-m, a steep rise of USD5.4/bbl compared to the December average. Anxiety over the impact of new sanctions on Russia and Iran, with fears of potential supply disruptions, triggered an upswing in prices in January offsetting even the demand decline:
- Global oil demand. Global liquids demand declined in January, decreasing by 1.85 MMb/d m-o-m to 102.8 MMb/d. The decline in consumption was partly driven by planned maintenance work reducing US refinery processing. Stronger feedstock prices and high freight rates contributed to subdued product outflows both in Rotterdam and Singapore
- OPEC 9 production (excl. Iran, Venezuela, Libya). OPEC 9’s production slightly rose by ~0.2 MMb/d to 27.1 MMb/d in January, with Saudi Arabia accounting for a majority increase of ~0.1 MMb/d. A gradual unwinding of OPEC+’s 2.2 MMb/d in production cuts is set to start from April 2025
- Non-OPEC production (excl. US shale). Non-OPEC production decreased slightly by 0.4 MMb/d m-o-m to 61.6 MMb/d. The US accounted for majority of the decline at 0.48 MMb/d but was slightly offset by smaller production increases in other countries
- US shale oil production. US shale production decreased m-o-m (and throughout most of 2024) at 8.9 MMb/d. The number of active rigs stood at 560 in January, down five units compared to December 2024
- Iran, Venezuela, Libya production. Combined production levels in Iran, Venezuela, and Libya slightly rose by ~0.1 MMb/d m-om, averaging at 5.6 MMb/d. Production levels have been steadily increasing since September 2024, mainly driven by Libya
- Commercial inventories.1 Global commercial inventories declined by ~1 million barrels in January, driven by a decline in OECD inventories. Overall, inventories have remained relatively steady at ~4.5 billion barrels over the last five months
- Market sentiment. The impact of new sanctions on Russia and Iran, with fears of potential supply disruptions, triggered an upswing in prices in early January. Market sentiment shifted to renewed concerns over the world economy amid emerging trade wars and its impact on the pace of oil demand growth. Looking ahead the global oil market is expected to remain uncertain in 2025 given the planned unwinding of OPEC+ cuts and expected growth in non-OPEC production volumes. In addition, the geopolitical and economic uncertainties add to the volatility
1 Non-OECD share of inventories is estimated, assuming that non-OECD inventories have 50% days of demand cover of OECD inventories
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Oil supply & demand dashboard: February 2025
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